Tesla's Model 3 Delay?; Why Disney Didn't Want Twitter; Intel Earnings - Eye On Tech

| About: Tesla Motors (TSLA)


The Tesla Model 3 will be delivered in mid-2018.

Disney didn't want Twitter partly because of the hate speech. Apparently, it played a role in Salesforce's decision too.

Intel tops earnings, but slips after providing slightly-below-consensus guidance. Is this a buying opportunity?

The Twitter (NYSE:TWTR) M&A story died almost as quickly as it started, after a number of companies pulled out of the running, followed by the frontrunner, Salesforce (NYSE:CRM), throwing in the towel.

One of the suitors involved was Disney (NYSE:DIS). It's worth mentioning that Twitter co-founder and current CEO Jack Dorsey also sits on the board of Disney.

In any regard, new reports say Disney lost interest in Twitter partly due to "concerns that the hate speech that's rampant on the social network would undermine Disney's family-friendly image."

For anyone that is a consistent Twitter user, it is easy to see the "Keyboard Warriors" and "trolls" out in full force, bogging down what otherwise could be helpful and constructive conversations.

Instead, insults and hate are slung from one account to the other, making for a highly negative experience at times. As if the trolling and haters weren't enough, acts of account hacks and lack of help from Twitter have also alienated users. One example? Someone hacked into, stole and tried to sell one of FinTwit's favorite swing trader's account, @SunriseTrader.

It's no surprise that Disney didn't want a hate-riddled property to go alongside its princesses and castle empire. It also doesn't help that Twitter doesn't make money, something that a lot shareholders (particularly in the House of Mouse) would take issue with. Personally, I'm one of them, and had invested in the company for its content and properties - not buying money-losing and directionless social platforms, despite that there is value to be had.

A comment from Rationality:

"The irony is that some of the hate speech through Twitter has tended to maintain user engagement. That is probably partly a reason why management has been loath to clamp down rigorously on hate speech. If it did clamp down hard, the number of active users would dive. It's a no-win situation for Twitter."

Perhaps this is true, and just another reason why it isn't a good fit for Disney. For Salesforce's part, abuse was also a concern.

"It's all quiet on Elon Musk's Twitter account so far today."

Generally, this isn't the news that many would see regarding the CEO of a high-profile company. But, this is Tesla (NASDAQ:TSLA) after all.

After the company slapped a "mid-2018 or later" date on its website for the upcoming Model 3, investors were scrambling for more details. Is the delivery date pushed back for new orders or the previous pre-order? Is there a hangup in the production process? Why the hell hasn't Musk tweeted us!?

Inhale. Exhale.

Thankfully, the company has clarified the situation. The previous 400,000 pre-ordered Model 3 units are not included in that estimate. However, those looking to plunk down the cash for a new Model 3 will have to wait some 20 months to get behind the wheel.

Making a new car isn't an overnight sensation - even for the companies that have done it for a hundred years. Tesla, still being a relatively new automaker, has a number of hurdles in its way to cleanly launching the mass production of the Model 3.

In fact, many people are wondering if Tesla will be able to do it, how much money it will take and if management will cripple its stock price in the process. (This sort of follows the tightrope theory I described earlier, where Tesla can be a great, revolutionary company but it won't be an easy path to the promised land).

Will it really all work out, where Tesla first introduces several high-end vehicles, launching the hype train that essentially financed (via investors' dollars) the Supercharger Network and Gigafactory, before steamrolling into a mass-produced vehicle?

That's the great debate and that's why management's decision to branch into energy storage and acquiring a cash-bleeding solar company has only heightened the bull-bear battle.

Speaking of That Solar Company…

Tesla is looking to acquire SolarCity (NASDAQ:SCTY), despite some questionable fundamental and financial situations, (unless these lawsuits have any ability to stop it).

Separately from that yet-to-be-determined tie-up though, is SolarCity's new pact with Airbnb (Private:AIRB). According to Airbnb, its guests like to stay in eco-friendly quarters and apparently place an emphasis on their carbon footprint.

Maybe that's why I always use HotelTonight…?

All kidding aside, the earth-conscious mindset from the folks at Airbnb led it to SolarCity, where the two have entered into a deal for its customers: Airbnb customers can receive up to a $1,000 rebate on their solar system from SolarCity, while new and existing SolarCity customers can sign up for a $100 travel credit from Airbnb.

While this news may not be market-moving by any means, it's at least interesting. It shows what two, forward-focused companies feel are important. It also shows where their customers are leaning on what's important. Before it gets too political though, let's turn to…

Intel's Earnings Beat (and Stumble)

Intel (NASDAQ:INTC) reported earnings after the bell Tuesday, beating on earnings per share estimates and topping sales expectations. Revenue climbed 9.1% year over year, while net income popped 21% to $3.9 billion.

Overall, it was a good quarter, but the roughly 5% decline in after-hours trading came after the company guided for revenues of $15.7 billion (+/- $500 million). Consensus estimates called for sales of $15.87 billion.

On the one hand, investors shouldn't be surprised by the stock's decline. Shares were hovering near 52-week highs going into the print, so any shortfall was sure to trigger a selloff. That said, the company's valuation isn't too stretched and Intel still pays a dividend yield of 2.75%.

Now comes the debate. If you think Intel is a sell, the assumption is that guidance will come in around that $15.7 billion figure, or below. That would make it, as of right now, a disappointment.

However, if you think Intel is a buy, then the current selloff likely looks attractive. Consider that in mid-September, Intel aggressively hiked its guidance for the quarter by $700 million. That took everyone off-guard and caused the stock to rally to new highs.

Could a similar action be in store? Perhaps, but I wouldn't necessarily bank on it. Instead, consider that business at Intel is going well, and a decline in the stock price could be a short-term buying opportunity on the way to the company's next strong report.

For instance, a $15.7 billion guide, plus or minus $500 million could put Intel's sales results more than $300 million over analysts' expectations - and that's even assuming consensus expectations don't come down, which they surely will.

That's not to say Intel can't come up short of expectations. Only that, if you're long the stock or were looking to get long, maybe this pullback is the chance you've been waiting for as management slightly lowers expectations, giving it the chance to impress investors in three months.

Disclosure: I am/we are long DIS.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.